The
amount of a loan for which you qualify
is based on two different calculations.
Using what are known as qualification
ratios, lenders evaluate your income
and long-term debts to determine
a "safe" amount for your mortgage
payments. A fairly standard ratio
is 28/33. Certain mortgage plans
sometimes use more liberal ratios-for
example, the Fair Housing Authority
currently uses 29/41.

Here's how it works: With a 28/33
ratio, you are allowed to spend
up to 28% of your gross monthly
income for mortgage payments.

The lender will then run a different
calculation. This one is your loan
payment and debt payments combined,
which may not exceed 33% of your
gross monthly income.

To calculate exactly how much you
may borrow, you also need an estimate
of interest rates. For example:
Suppose you had $1,000 a month for
mortgage payment; at 7% that would
let you borrow about $160,000 on
a 30-year loan. At 6% the loan amount
would be nearly $175,000. If your
rate were 8%, the loan amount would
be a bit less than $150,000.

As part of this calculation, you
also need to estimate and include
the property taxes, homeowner's
insurance, and homeowner association
fees (if applicable) you might need
to pay, which are considered part
of your monthly expense.

2. Why
do I need to check my credit prior
to purchasing a house?

Even
if you're sure you have excellent
credit, it's wise to double-check
at the outset. Straightening out
any errors or disputed items now
will avoid troublesome holdups down
the road when you're waiting for
mortgage approval.

You may see disputed items, in addition
to errors caused by a faulty social
security number, a name similar
to yours, or a court ordered judgment
you paid off that hasn't been cleared
from the public records. If such
items appear, write a letter to
the appropriate credit bureau. Credit
bureaus are required to help you
straighten things out in a reasonable
time (usually 30 days).

3. How
much do I need to put down for a
down payment?

This
depends on many factors. For purchases,
we have loan programs that allow
financing from 95%, 97%, to
even 100% of the home value. Of
course, loans with a loan-to-value
ratio (LTV) of greater than 80%
will likely require private mortgage
insurance (PMI) by the lender. For
refinance loans, we have several
"no out of pocket" loans available.
For exact amounts, please contact
us.

4. How do I find an agent to work with?

You need to find someone with whom
you are comfortable and that you
can trust to assist you through
the process of buying or selling
a home. The best way to do this
is by interviewing several agents
prior to reaching a decision. Key
traits we have always looked for
are experience, honesty, integrity,
and knowledge.

5. What does "multiple listing" mean?

Most real estate agencies cooperate
with other real estate agencies
in showing and selling their listings.
When someone decides to sell their
property, they find an agent to
work for them. That person is responsible
for the marketing and sale process.
When the home is listed, it is entered
into the multiple listing system
(MLS) database and your house is
then available to all agents and
automatically listed on any sites
that subscribe to the MLS.

6. What is a buyer's agent?

A real estate agent who is working
on the buyer's behalf. The buyer
agent is responsible for representing
buyer and should only have that
client's interest in mind. A seller's
agent is responsible for the seller's
interests.

7. As a first-time homebuyer, what
should I do first? Find a mortgage
lender or find a house?

It is usually best to first shop
for a mortgage and obtain pre-approval
for an amount that is affordable
to you. Then you can negotiate a
purchase agreement with the seller
for an amount that you know you
can afford. Having the preliminary
approval of your lender will give
you an advantage in negotiating
with the seller, especially in a
tight market.

8. Why do I need a home inspection?

A home inspection is critical because
you can't always see everything
that is wrong with a house. Would
you purchase a used car without
having a mechanic inspect it first?

Even a good seller may not be aware
of issues that are developing with
a house.

Inspections should cover (but are
not limited to): an overall building
inspection (covering structure,
electrical, plumbing, and HVAC systems),
septic systems, wells, radon, pest,
lead, and water quality, and mold.

If you have any concerns, you should
discuss them with the inspector
prior to the inspection so that
they will know to concentrate on
them.

9. Why do I need title insurance?

Title insurance is always required
by a bank or other commercial lender
in a real estate transaction to
protect their investment. In a private
mortgage transaction, such insurance
is advisable but not required. Title
insurance will protect the mortgage
holder against contractors' liens,
boundary disputes, and various other
liens that may have been placed
on the property.

10. What is the difference between an
inspection and an appraisal?

A home inspection is usually not
required but an appraisal is.

A home inspection is used to discover
any issues that may be wrong with
the home or property allowing you
to make an informed decision. The
home inspection will help protect
YOUR investment. An appraisal is
used to ensure that the price being
paid for the house is less than
or equal to its actual property
value. The appraisal helps the mortgage
lender ensure that there will be
sufficient value on the home/property
to cover its investment should you
default on the mortgage. It also
helps you ensure you are not overpaying
for the house/property.

11. How long does it take from when
I make an offer until the house
is mine (closing)?

After you have made an offer on
a home a number of steps have to
be completed. Your lender will need
to receive and verify your documentantion,
they will need the appraisal, title
information and any other requirements
that your loan requires.

You will also need to complete any
other contingencies that you may
have listed in your offer like the
results of a home inspection, survey
or sale of your other home.

Once all these conditions are met
you will be cleared to close. A
typical closing takes 30 to 60 days
however, they can be completed in
as little as 12 days if all conditions
are completed quickly.